A new incentive from HSBC means that ATMs across the country will soon show warnings to customers if a cash withdrawal will take them over their overdraft limit. This new measure, which is the first of its kind, came into force at the start of October across all of HSBC's 3500 cash machines. It is designed to prevent customers from unwittingly going over their limit and incurring unanticipated fees. Understandably, these warnings will only appear to HSBC customers as they are the only ones whose overdraft details are registered with HSBC.
The move will come as great news to many who have difficulty keeping a track of their balance and withdrawals. It also reassures customers as HSBC aims to make its fees and charges even more clear so that no customer is left in the dark about what is happening to their account. The issue is a serious one: HSBC charges £25 for simply going £25 over the overdraft limit, and any withdrawal under this amount (but over £10) incurs a charge of the same amount as the withdrawal.
A common system which is already in place across 95% of HSBC's cash machines is that of being able to check your balance before you withdraw. However, the majority of customers do not take advantage of this, making this new scheme particularly useful for them. As Joe Garner of HSBC says: "We believe that alerting customers at this point will enable them to make an informed choice about whether to proceed."
Banks such as HSBC have long been attacked over the highly controversial overdraft charges with thousands of customers attempting to claim a refund. Indeed HSBC has revealed that over £120 million has been reimbursed over the first half of this year alone. It makes sense then that HSBC are trying their best to resolve the issue by properly alerting customers to all charges. Now no customer will be able to use ignorance as an excuse.
Furthermore, the bank also explains that there will never be a charge if the unauthorised withdrawal is up to £10, if it is the first time in 6 months that a breach has occurred, or if extra money is paid into the account by the end of the day to make up for the withdrawal. HSBC also insists that all of its customers are given at least 14 days notice before any fees are taken from their accounts and they will never be charged more than the maximum by which they are overdrawn during the month. With all these conditions in place, the majority of customers should have no problem even if they do end up going over their limit by accident.
All in all, HSBC is putting a positive measure in place to make it less likely for customers to end up being charged excess fees. Hopefully in the near future, all other banks will follow suit.
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